PROBLEMS (GROUP B) 00 P7-34B Homestead Financial Corporation owns numerous investments in the shares of other companies. Homestead Financial completed the following long-term investment transactions long ons on ome 2017 May 1 Sept. 15 Oct. 12 Purchased 8,000 shares, which make up 25% of the common shares of Mars Company at total cost of $450,000 Received a cash dividend of $1.40 per share on the Mars investment Purchased 1,000 common shares of Mercury Corporation as a non-strategic investment, paying $22.50 per share Received a cash dividend of $0.75 per share on the Mercury investment Received annual report from Mars Company. Net income for the year was $350,000 Dec. 14 31 At year-end the current fair value of the Mercury shares is $19,200. The fair value of the Mars shares is $740,000. The company reports changes in fair value through net income. Requirements 1. For which investment is current fair value used in the accounting? Why is fair value Useu for one investment and not the other? 2. Show what Homestead Financial will report on its year-end balance sheet and income sta ment for these investments. It is helpful to use a T-account for the Long-Term Invest in Mars Shares account.) Ignore income tax